THE CHINA PLOY

If you follow what's going on in China you might think it, like other heavily centralized control states, is alone in clamping down on those who criticize government. You'd be wrong.

It's a growing concern for governments wide and narrow. Just last week at the G20 meeting Chinese officials pledged not to let their currency, the yuan, fall. In street jargon, devaluation. If wide spread enough it goes by another name, beggar thy neighbor or currency war. Lowering interest rates, especially if you sup at the export trough for you economic sustenance as China has for years, is just one way to do it. There are plenty of others, including the once unusual but now widely accepted ploy of creating negative interest rates. Lowering bank reserve requirements is another.

Governments always at these away-from-home meetings claim they're going to line up with such and such cause only to the local thing when their return home.They also claim they're not going to devaluate their currency just before they do. See Soros and the British pound. Or more recently Kyle Bass and others and the yuan

As shares sank, the government pulled out all the stops from closing trading to allowing traders to auction their homes for collateral to making leverage easier. But here's the most troubling one, cracking down on negative news and it purveyors to, as a Barron's article recently noted, "...media re-education edicts, censoring negative views on the growth outlook, and demonizing those who dare to go off-script."

To those of us in the semi-free country called The Land of the Free and The Home of the Brave, this might seem unconscionable. But have no fear; it here just in a more subtle form for now. The on-going gouge called a presidential primary is just one example. The upcoming confiscation of the $100 is another. The constant MSM drumbeat against gold is another.

This government largess in Street jargon is called the China put. We've for years had our own from Greenspan to Bernanke to Yellen. Truth is we're famous for exporting financial ploys and products. And as Barron's obliquely notes, here's another one we set the bar for: the Chinese government just gave domestic banks the green light to issue $8 billion of securities "backed by proceeds from non performing loans."

A more recent form here rolled out by big banks is lowering lending standards for home buyers with spottier credit histories or none at all to circumvent certain recent regulations on such loans.

It's all in the packaging.